How to File PCORI Fees Using Form 720: A Step-by-Step Guide
If you sponsor a self-insured health plan or issue specified health insurance policies, the IRS expects you to pay the PCORI fee every year. This fee funds research that helps patients and providers make better-informed healthcare decisions, and it is reported through IRS Form 720. With the July 31, 2026 deadline approaching, here is a clear, expert guide on how to file PCORI fees using Form 720 without errors, penalties, or last-minute stress.
What Is the PCORI Fee?
The PCORI fee is an annual excise tax established under the Affordable Care Act (ACA). It applies to:
- Issuers of specified health insurance policies (fully insured plans), and
- Plan sponsors of applicable self-insured health plans, including HRAs.
The fee equals the average number of covered lives multiplied by an inflation-adjusted dollar amount set by the IRS each year.
PCORI Fee Rates for 2026
| Plan Year Ending | Fee Per Covered Life | Filing Deadline |
|---|---|---|
| October 1, 2024 – September 30, 2025 | $3.47 | July 31, 2026 |
| October 1, 2025 – September 30, 2026 | $3.84 | July 31, 2026 |
Although the Form 720 is normally a quarterly excise tax return, PCORI fees are reported only once a year — on the second-quarter Form 720.
Who Must File the PCORI Fee?
You must file if you are:
- An employer sponsoring a self-funded medical plan
- An employer offering a Health Reimbursement Arrangement (HRA)
- A health insurer covering U.S. residents
- A plan sponsor of a multiple employer welfare arrangement (MEWA)
If you are unsure whether your plan qualifies, read our detailed guide on who is required to pay the PCORI fee.
How to File PCORI Fees Using Form 720: Step-by-Step
Follow these six steps to file accurately the first time.
Step 1: Gather Your Plan Information
Collect your Employer Identification Number (EIN), legal business name, mailing address, and plan year-end date. Confirm whether the plan is self-insured or fully insured, since that determines who pays the fee.
Step 2: Calculate the Average Number of Covered Lives
The IRS allows three approved counting methods:
| Method | How It Works | Best For |
|---|---|---|
| Actual Count | Add covered lives for each day, then divide by total days in the plan year | Small plans with stable enrollment |
| Snapshot | Average covered lives on the same date in each quarter | Most self-funded employers |
| Form 5500 | Use participant counts already reported on Form 5500 | Plans with simple coverage structures |
For HRAs, you can count only the employee (not dependents), which significantly lowers the fee.
Step 3: Multiply Covered Lives by the Applicable Rate
Use $3.84 for plan years ending between October 1, 2025 and September 30, 2026. For earlier plan years ending in 2025, apply the $3.47 rate.
Example: 120 covered lives × $3.84 = $460.80 PCORI fee.
Step 4: Complete Form 720, Part II, IRS No. 133
On Part II of Form 720, locate IRS No. 133 — Patient-Centered Outcomes Research Fee. Enter:
- Average number of covered lives
- Applicable rate
- Total fee owed
Mark the quarter ending June 30 at the top of the form, even if your plan year ended earlier. Need help with this section? Use our Form 720 Part II filing service.
Step 5: Pay the Fee Electronically
Pay through EFTPS (Electronic Federal Tax Payment System) and select Q2 as the tax period. You can also pay through an IRS-authorized e-file provider when you submit Form 720 online.
Step 6: E-File Before July 31, 2026
The fastest, safest way to handle how to file PCORI fees using Form 720 is to e-file with an IRS-authorized provider. File your PCORI fee with eFileExcise720 and get real-time IRS approval — no paper, no software, no waiting.
What If You Missed the Deadline?
Late PCORI filings can trigger penalties under IRC §6651 — up to 5% per month for failure to file and 0.5% per month for failure to pay. If you missed a previous plan year, file a separate Form 720 for each missed year. For corrections to a previously filed return, use Form 720-X. Learn more about Form 720 penalties and interest or our Form 720 late filing service.
PCORI vs Other Excise Taxes
If you also deal with fuel excise tax credits or environmental taxes, you may need an 8849 form for refund claims. Form 720 reports the tax owed, while Form 8849 helps you recover overpaid excise taxes. See the full comparison on Form 720 vs Form 8849, or file Form 8849 online directly.
Frequently Asked Questions
1. When is the PCORI fee due in 2026?
The PCORI fee for plan years ending in 2025 is due by July 31, 2026.
2. Can I file Form 720 only for PCORI?
Yes. Many employers file Form 720 once a year solely to report the PCORI fee on IRS No. 133.
3. What is the PCORI fee rate for 2026?
The rate is $3.84 per covered life for plan years ending between October 1, 2025 and September 30, 2026.
4. Is the PCORI fee tax-deductible?
For employers, the PCORI fee is generally considered an ordinary and necessary business expense and is deductible. Confirm with your tax advisor.
5. How do I e-file Form 720 quickly?
Use an IRS-authorized provider like eFileExcise720 to submit your return in minutes.
File With Confidence Before July 31, 2026
Now that you understand how to file PCORI fees using Form 720, the next step is execution. Whether you have 10 covered lives or 10,000, eFileExcise720 simplifies every step — from calculation to IRS confirmation. Start your PCORI filing today and meet the July 31, 2026 deadline with confidence.